- Key laws and regulations, including recent changes and expected developments over the next year
- Foundational data privacy obligations including information and notification requirements, data subject rights, accountability and governance measures, and responsibilities of data controllers and
A Roadmap to Trump’s DEI Executive Orders for US Employers
In the first two days of his presidency, President Trump signed a series of executive orders aimed at dismantling diversity programs across the federal government, revoking longstanding DEI and affirmative action requirements for federal contractors, and directing public and private entities to end policies that constitute “illegal DEI discrimination.”
Suffice it to say the orders have left federal contractors, corporations, nonprofits, and other employers in the private sector grappling with what to do next. While the EOs reverberations will be felt for some time and the DEI journey for federal agencies and the private sector is likely to be a circuitous one as challenges are raised in the courts, before Congress and in the court of public opinion, employers do need to gain some traction and start the trip. In this article, we present a roadmap to consider as employers work through the impacts of the EOs on their organizations.
At the starting line: what the EOs do and don’t do
Executive orders are a powerful tool through which the President issues formal directions to the executive branch, agencies and officials on how to carry out the work of the federal government. Historically, EOs mostly addressed administrative matters, but some sought to drive substantial policy changes. While congressional approval is not required for an EO to be effective, judicial review is commonplace and also, EOs can be reversed by later administrations.
President Trump’s EOs addressing DEI do not change existing discrimination statutes, such as the bedrock prohibitions on discrimination in employment in Title VII of the Civil Rights Act of 1964. The orders do not ban or prohibit any or all private employer DEI programs. Rather, the orders direct federal agencies and deputized private citizens to root out (through investigations, enforcement actions, or False Claims Act litigation) “illegal discrimination and preferences” and, for government agencies, to take particular actions.
Similar to the situation following the US Supreme Court SFFA decision in June 2023, if your DEI programs were lawful before Trump’s inauguration – they still are. What is “illegal” under federal law today is the same as it was before Trump’s presidency. But what’s clearly different is the ferocity of the federal government’s intent and resources dedicated to scrutinizing alleged race- or sex-based preferences in the workplace, and the resulting level of scrutiny applied to DEI programs.Continue Reading A Roadmap to Trump’s DEI Executive Orders for US Employers
New York Employer 2025 Checklist: Top 10 Changes to Know This January
From the groundbreaking mandate for paid prenatal leave to the upcoming requirement that employers disclose AI-related layoffs, 2025 is set to be a transformative year for New York employers. As you navigate the latest employment laws, keep this checklist close at hand. While it doesn’t cover every new regulation, it highlights the key changes our
Back to Business: Trump’s Second Term and the Four Major Shifts Employers Should Expect
Companies with a US workforce can expect material changes to employment laws under the Trump administration, with impacts felt across their business operations. President-elect Trump’s first term, his campaign platform, and the typical shifts in a Democratic to Republican transition provide clues about what’s to come: federal agencies, policies and rules will become more business-centered and many of the Biden-era worker-focused protections will be rolled back.
Below are four major shifts we anticipate:
(1) Significant shifts in US Department of Labor policy
The end of the DOL’s 2024 final overtime rule. On November 15, 2024, a federal judge in Texas blocked implementation of the DOL’s final rule in its entirety, thereby preventing the agency from instituting increases to the salary thresholds for the “white collar” overtime exemptions under the Fair Labor Standards Act. While the government may appeal the judge’s order before the change in administration, any such appeal is likely to be short-lived come January 2025.
Accordingly, employers can halt plans to change their compensation levels or exempt classifications in response to the now-blocked rule. If such changes have already been made, employers should consult with counsel on how best to unwind undesirable changes, if any.
A lower burden for employers to classify workers as independent contractors under federal law. Trump will likely reverse Biden’s worker-friendly contractor classification efforts, making it easier for businesses to classify workers as independent contractors, and pivoting away from the Biden administration’s 2024 DOL independent contractor rule.
Notwithstanding this easing at the federal level, employers must remember that, under US and state law, there is no single test for independent contractor classification. Many states have their own tests, which are often more stringent than federal law and that apply to state wage and hour claims. Moreover, even within the same states, different tests will apply to unemployment claims, workers’ compensation, wage and hour, and taxation.Continue Reading Back to Business: Trump’s Second Term and the Four Major Shifts Employers Should Expect
The EU Corporate Sustainability Reporting Directive | Employment Law Implications
The Corporate Sustainability Reporting Directive represents one of the biggest ever shifts in reporting requirements for organizations. (For most companies, the first reporting will be on the financial year which starts after January 1, 2025.)
It requires most large organizations to comply with mandatory, detailed sustainability reporting standards, including extensive employment related disclosures. We are already advising a number of organizations in their sustainability journey and employment-related implications of the CSRD and, if it is not something you are already looking it, it will likely be on your radar very soon.
tl;dr
The employment-related implications of the CSRD mean that organizations will have to provide detailed descriptions of workforce policies; provide information on how the company engages with workers and workers representatives; and provide specific metric and target data relating to diversity, wages, compensation, health and safety and incidents and complaints (e.g., harassment and discrimination complaints), amongst others. There are also further disclosures required relating to workers in the supply chain. What is clear is that reporting will cover some potentially very sensitive topics, requiring sufficient preparation and careful consideration.Continue Reading The EU Corporate Sustainability Reporting Directive | Employment Law Implications
The Legal Playbook for AI in HR: Five Practical Steps to Help Mitigate Your Risk
By and large, HR departments are proving to be ground zero for enterprise adoption of artificial intelligence technologies. AI can be used to collect and analyze applicant data, productivity, performance, engagement, and risk to company resources. However, with the recent explosion of attention on AI and the avalanche of new AI technologies, the use of AI is garnering more attention and scrutiny from regulators, and in some cases, employees. At the same time, organizations are anxious to adopt more AI internally to capitalize on productivity and efficiency gains, and often in-house attorneys are under pressure from internal clients to quickly review and sign off on new tools, and new functionalities within existing tools.
This is especially challenging given the onslaught of new regulations, the patchwork of existing data protection and discrimination laws, and heightened regulatory enforcement. For example, there has been a considerable uptick in European data protection authorities investigating how organizations are deploying workforce AI tools in the monitoring space, including time and activity trackers, video surveillance, network and email monitoring, and GPS tracking. Authorities have issued substantial fines for alleged privacy law violations, including for “unlawfully excessive” or “disproportionate” collection. For example, the French data protection authorities recently imposed a USD $34 million fine related to a multinational e-commerce company’s use of a workplace surveillance system.
The AI regulatory landscape is rapidly evolving, and in most places compliance is still voluntary. However, organizations should build their AI governance programs to include key privacy, data protection, intellectual property, anti-discrimination and other concepts – and a good place to start is with these HR tools given their widespread use and the increased scrutiny. Legal Departments should consider these five key actions:Continue Reading The Legal Playbook for AI in HR: Five Practical Steps to Help Mitigate Your Risk
Summer Replay: Tune In To Our Global Employment Law Update Series (Recordings Linked!)
In June, we offered our annual Global Employment Law webinar series sharing expert insights on the business climate in major markets around the world for US multinational employers. Baker McKenzie attorneys from over 20 jurisdictions outlined the key new employment law developments and trends that multinationals need to know in four 60-minute sessions.
ICYMI: click below to hear updates for the Americas, Asia Pacific, Europe and the Middle East and Africa and contact a member of our team for a deeper dive on any of the information discussed.
Session 1: The Americas
Presenters: Andrew Shaw, Clarissa Lehmen*, Daniela Liévano Bahamón, Benjamin Ho, Liliana Hernandez-Salgado and Matías Gabriel Herrero
Click here to watch the video.
*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Growing Globally? Tune into our Field Guide to Going Global webinar June 27
When companies expand to new countries, they need to prioritize different legal and tax topics depending on whether they are just accepting orders from abroad (B2B or B2C), engaging with distributors, hiring contractors, or setting up formal presences. In this webinar, Baker McKenzie partners provide practical guidance on how to make decisions on going or
Thirteen Things You Didn’t Know About the FTC’s Noncompete Ban and Five Steps to Prepare Now in Case it Takes Effect
The FTC rule banning post-employment noncompetes was published in the Federal Register on May 7, which means the rule will take effect on September 4, 2024, unless pending lawsuits to void the rule are successful.
Despite considerable uncertainty around when, or even whether, the rule will apply, employers should prepare now so as not to be caught flatfooted. The first step is to understand the rule’s parameters and potential impact on your business. Our FAQs guide you through the intricacies of the rule and the steps you should take while waiting for the lawsuits challenging the rule to be resolved.
Application of the Rule to Workers
1. Does the rule apply to B2B noncompetes?
No, the FTC rule does not apply to business-to-business (B2B) noncompetes. Instead, existing federal antitrust laws should continue to be considered when evaluating B2B noncompetes.
2. Does the rule apply to all workers?
No, there are limited exceptions. First, the rule does not invalidate existing noncompete agreements (i.e. agreements entered into on or before the effective date of September 4, 2024) with “senior executives.” After that date, new noncompetes with all US employees will be prohibited.
“Senior executive” means a worker who received “total annual compensation” of at least $151,164 in the preceding year (or the equivalent amount when annualized if the worker was employed during only part of the year) and who is in a “policy-making position.”
- “Total annual compensation” may include salary, commissions, nondiscretionary bonuses, and other nondiscretionary compensation earned during the preceding year, but does not include the cost of, or contributions to, fringe benefit programs.
- Those in a “policy-making position” may include the President, CEO or equivalent, or others with “policy-making authority,” meaning “final authority to make policy decisions that control significant aspects of a business entity or common enterprise.” In the Supplementary Information to the rule (the FTC’s commentary on the rule), the Commission notes “many executives in what is often called the ‘C-suite’ will likely be senior executives if they are making decisions that have a significant impact on the business, such as important policies that affect most or all of the business. Partners in a business, such as physician partners of an independent physician practice, would also generally qualify as senior executives under the duties prong, assuming the partners have authority to make policy decisions about the business.”
Second, the rule does not apply to workers outside of the United States. See FAQ 11 below.Continue Reading Thirteen Things You Didn’t Know About the FTC’s Noncompete Ban and Five Steps to Prepare Now in Case it Takes Effect
How to Steady the Ship When the NLRB’s Expansive Protections Rock the Boat (Video Chat)
2023 was a landmark year for labor in the US, and 2024 is on track to keep up. Last year, the NLRB’s General Counsel was relentless in overturning precedential decisions and standards impacting both unionized and non-unionized employers. The result was an overall employee-friendly shift to labor laws encouraging both unionization and concerted employee actions